Dealing with Binary Options can be a simpler solution if you need or want to trade Forex because you basically pick your target market, then the currencies, and finally you posit that the EURO will end above or below its current price at the end of the hour. If you decide above, pick a Call Binary Option. If you decide below, pick a Put Binary Option. There are two winning scenarios with your trade. Your trade will be “In the Money” if you choose a CALL Binary Option, and, at expiration, the price closes above the price that you purchased. Also you could be “In the Money” if you picked a PUT binary option, and, at expiration, the closing price closes below the strike price that you purchased to open the option trade. doss.
Forex binary options offer a number of evident obvious strengths which attract conventional Forex traders. First, binary options only require for a trade to close within the smallest fraction of a pip over or under your strike price, and your account is credited with proceeds of up to 81% profit which can occur in less than an hour. On the other hand, a conventional Forex trader, dealing with a maximum leverage of 100x, and instituting a $1000×100 leverage trade would need to gain 81 pips to recreate this identical profit! Incredible difference.
Another exciting aspect to Binary Options is that expiration can occur hourly, as with European style options, with no opportunity of exercising before expiration. This can be very beneficial since conventional Forex traders are required to execute a Stop-Loss which can be easily lost in the volatility especially when unexpected news happens. With high volatility, it may be fortuitous to utilize the risk management of an hourly expiring Binary Option, instead of placing Stop-Loss orders of conventional markets.
Finally, the most interesting use of Binary Options as compared to conventional Forex trading is the hedging possibilities. Conventional Forex traders, unfortunately take losses when their Stop Loss is hit. As of late, it has become usual to transfer the risk from below the buy point to above it by using Binary Options. As an example, if you place a conventional EUR/USD long position combined with a Stop/Loss, and simultaneously buy a Put Binary Option, then you are capable of covering your losses or perhaps even being profitable in the event that your long position goes bust. This strategy in reality transfers the risk from below the Stop Loss to above it. This can be very fortunate if you believe that your trade will succeed when a rally continues in the right direction.